Plans to build a wave power station off Pembrokeshire have been unveiled.
Backers hope to have what they call a Wave Dragon unit in the sea at West Dale Bay near Milford Haven in 2007.
It is a floating device that works by channelling waves into a reservoir above sea level and uses turbines to generate hydro-electric power.
The aim is to eventually place up to 11 of the units about 10 miles out in the Irish Sea to generate enough electricity to power 60,000 homes.
KP Renewables and Wave Dragon Limited have submitted an application for £5m in funding for the first stage of the scheme to the Welsh European Funding Office.
The technology has been developed and tested over the past eight years in Denmark and Ireland.
The floating units are moored to the sea bed but are able to adjust their position to the on-coming wave direction.
Water is channelled into a reservoir above sea level. It is then released through a number of turbines to generate electricity in the same way as hydro-electric power plants work.
Under phase one of the scheme, one unit capable of generating enough electricity for up to 6,000 homes would be tested at West Dale Bay.
If they pass environmental impact and other regulatory assessments the partners plan to locate up to 11 of the units in deeper water off the west Wales coast.
"We expect it to be about 10 miles out in the Irish Sea," said Wave Dragon chairman Hans Christian Sorensen.
"The successful commissioning of the first stage unit will open up the renewable energy market in the UK for Wave Dragon technology.
"The subsequent development, in the second stage, of a full 70MW installation will represent the UK's first true wave power station."
Meanwhile, plans to create a tidal lagoon in Swansea Bay capable of producing energy for more than 10,000 homes are progressing.
Tidal Electric, which has been doing tests in the area, is about to start seeking planning consent.
It was announced earlier this month that plans by German firm E.on for 30 440ft tall wind turbines at Scarweather Sands, off Porthcawl, were being put on hold until at least 2008.